The race for electrification in the automotive industry has begun

29 September 2017 Consultancy.uk

Electrification is starting to have a noticeable impact on the global automotive industry, according to a new report by AlixPartners. The overall market share of battery-powered, fuel cell and plug-in hybrid vehicles (together electrified vehicles) sold world-wide has increased approximately six-fold since the start of 2013, today accounting for a 1.20% share of total sales.

In the second quarter of this year, sales of electrified vehicles reached 260,000 units, compared to 41,000 early in 2013, despite the fact that the average range of electrified vehicles has stayed roughly the same (the EV range increased by just 10 kilometres).

There are, however, significant regional and country-specific differences, finds the AlixPartners study, with China leading the way. In the last quarter, vehicles with an e-range* of around 22.5 million kilometres were sold in China, while this was only 12.6 million kilometres in Europe. North America followed with about 10 million, while Japan and Korea combined sold two million kilometres worth. Together these five regions/countries account for 86% of annual sales in the global automotive sales market, which is forecasted to break through the barrier of 100 million units as a whole by 2020.

Sales of sales of electrified vehicles

“European, North American and Japanese-Korean sales of electric vehicles is in danger of falling behind that of Greater China. This is a major challenge not just for the automotive industry, but also for governments that will need to think even more about incentive and infrastructure programmes in order to support industrial and economic growth,” commented Nick Parker, an automotive expert at AlixPartners.

The importance of government intervention to stimulate the sales of electrified vehicles is best illustrated in Europe. When it comes to the share of electrified cars sold within the wider sales mix, Norway, Iceland, the Netherlands, Austria, Sweden and Switzerland occupy the top six places. By this measure, China, which is seeing an uptick in car sharing demand, ranked only ninth, but is still ahead of the USA (rank 14) and Germany (rank 15). Parker added, “The success of some European countries shows that the automotive market can be successfully electrified through targeted and coherent state programmes which significantly boost the sales of electrified vehicles.”

A more detailed look at the progress of the European manufacturers shows a split picture. Many European manufacturers have not yet been able to expand their sales of electrified vehicles. Renault-Nissan is the most active player in the sustainable cars segments, followed by BMW which has benefitted by a strong green focus over the past twelve months. Overall, there is only a slight upward trend across European producers, with German giants Daimler and VW, and French rival PSA showing little movement in the performance vis a vis the previous year.

Electrified vehicles & top 5 OEMs by quarter

Tesla in a league of its own

Not surprisingly, Elon Musk’s Tesla is found to drive in a league of its own. Tesla sells the largest number of electrical vehicles, by its very nature, as the only major electric-only manufacturer, and its EV range is quite high, at an average of 489 kilometres, compared to for instance 276 kilometres for Renault/Nissan, 276 kilometres for General Motors and 59 kilometres for Daimler. Volkswagen, the world's largest automotive manufacturer, sold around 16,000 electrified vehicles last quarter, comparable to Toyota, while around 4,000 units less than BMW.

Commenting on the key results of the study, Andrew Bergbaum, a Managing Director at AlixPartners, said “The results show that the electrification of the automotive industry has arrived and many automotive manufacturers have taken the opportunity to grab market share with increased electrification of their fleet. Although China is a key market for its size, the commitment by some European governments shows that there is a lot to be gained for car manufacturers in Western markets. While Tesla has been a pioneer, many Chinese players are on the road to catch them, and in Europe, both BMW and Renault-Nissan are showing great progress.”

* E-range measures the electric kilometre range sold per battery load for all vehicle types.

Related: Automation and electrification to overhaul global automotive industry.

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